Everyone loves production work. The interest in factories in the United States is something President Joe Biden shares with his predecessor, Donald Trump. “I could not believe for a second that the vitality of American production was a thing of the past,” Biden said in January when he signed an executive order to encourage more federal government purchases of U.S.-made goods. In the UK, the ruling Conservative Party has tilted the notion that jobs in new factories in struggling regions will reduce geographical inequality.
A new report from the UK Center-Right Think Tank summarizes the argument: Production is a highly productive sector that offers good, well-paying jobs to people with no education, with alternative options often low-paying jobs in the service sector. It is certain that many places that have lost productive jobs in recent decades have suffered profound social and economic damage. But is it possible to recover these jobs?
Production in richer countries is more productive because automation and offshore labor-intensive processes mean that the sector now needs fewer people to produce the same amount of goods. I once got bored of a young man who quit his job at a seat belt factory. “My job was actually to sit in a chair and press a button or two every two minutes,” he said. In a rich world the idea of “currency devaluation” is not entirely correct. Industrial production has risen in countries such as the United States and the United Kingdom, despite declining industrial employment.
Jigar Kagade, an economist at the Tony Blair Institute who has worked for Jaguar, Land Rover and the Mick UK consortium, says new manufacturing initiatives in countries like the UK are capital intensive without creating many jobs. “Would you like to increase jobs if the jobs that come back to us are less skilled and less productive?” Kakade asked. “We do not want to compete in labor costs. This is a dangerous situation in global value chains and should not be a workers’ ambition,” he said.
Wealthy countries have economic forces that create the need for greater industrialization, of which green energy projects and some consumer goods benefit from severely deficient supply chains. Kagade says policymakers can “go behind” these trends, but don’t expect them to create a large number of jobs for those with normal qualifications, let alone in their chosen fields.
If you are going to use grants or other concessions to force companies to set up factories in some places, their superficial roots mean that they will close again if they are not proven enough. Within large companies, different factory locations often compete with each other because workers are familiar with the inner ‘league tables’.
In Glasgow, McVeigh’s biscuit factory is set to close soon, resulting in the loss of 500 jobs. However, demand for McVeigh is still high, but its owner, Platts Global, says the plant has more capacity than all seven of its UK bases. Scottish Enterprises, a development company, provided 8,000,808,000 to the company in the “Training Assistance Fund” in 2014, which “allowed staff upgrades at Tolkien, resulting in 485 jobs being secured”. “All conditions for this grant have been met,” Platis said. The company provided an additional 193 193,000 to the company in 2016/2017 to support a project to bring the Nipples brand from Turkey to Glasgow.
One sustainable strategy to help low-wage workers and their local economies is to turn the growing “bad jobs” into “good jobs” in sectors such as maintenance and warehousing. After all, production work was also bad. In the 1930s Auto Workers News described how men leaving a Ford plant in the United States were exhausted by the high frequency of assembly lines, and they fell asleep within minutes of loading train cars, even on foot. Industrial accidents are so common in Detroit’s manufacturing hub that novelist Erskine Caldwell called it the “city of eight fingers.” These jobs became decent because workers, with the help of pro-government governments, fought for better conditions, concessions and a greater share of productive gains.
It would be wrong to say that today’s service sector jobs do not have the potential for productivity development to sustain better wages and conditions. A few years ago, Amazon warehouse pickers were picking up about 100 items an hour. Now, as robots bring shelves to themselves, staff take in 300 to 400 items per hour. The nostalgia for productive work is understandable, but unproductive. We cannot change history, but we can learn from it.
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